Continental, Copa Airlines Interested in Buying Colombia`s Avianca

A merger made up of Panama´s Copa Airways and U.S. Continental Airlines is putting together a buyout bid for Avianca, Colombia´s premier air carrier. The announcement is already putting a few frowns on what many experts believe it´s going to be a dog-eat-dog competition among several rival companies willing to purchase the bankrupt Colombian airline.

Last week, Brazilian company Sinergy -owned by oil tycoon German Efromovich- made a $64 million bid to buy three quarters of Avianca´s shares together with the Colombian airline´s debt of some $300 million.

But a lawyer from Avianca´s Creditor Committee said in the New York Bankrupt Court that Sinergy is not the only company interested in tossing a bid on the table. Avianca filed for Chapter 11 last year in a U.S. courthouse.

For his part, an attorney representing the Copa-Continental merger spelled out his group´s interest in Avianca. Continental, that owns 49 percent of Copa´s holding company, will definitely enhance operations to the south if the move is eventually approved.

Under the Sinergy´s proposal, Valores Bavaria -a Colombian conglomerate- will hand over its 50 percent of Avianca´s shares to Sinergy, while the National Federation of Colombian Coffee Producers will see their stocks slashed from 50 to 25 percent.

The names of Lan Chile and TACA, the Central American airline, have also sprung up as potential bidders.

Avianca has been involved in streamlining and cost-cutting efforts since it filed for Chapter 11 a year ago. The company´s operational benefits rose to $165 million in 2003 and netted $580 million worth of revenues.